Summit: Connections, Discussions + Progress

Change in the building industry is coming faster than we might think. “The businesses that will be successful in 2025 won’t be run the way they are today. Innovation is necessary to survive and be relevant in the next six years,” C.R. Herro, vice president of Innovation at Meritage Homes, said at the 2018 Summit in New Orleans April 16-18.
What that innovation will look like is the big question and was the focus of the meeting, where 100 builders, manufacturers, suppliers and other housing industry players came together to break down silos and find ways to leverage relationships in order to plan for the future. As Lennar’s Diane Morrison, national vice president of marketing and sales, noted during a table discussion, her relationship with builders is often through the purchasing and finance departments – not with those in the innovation area or even in direct discussion with a manufacturer. “It’s rare and it’s a missed opportunity, and as a result of that we’re not thinking about things holistically. We’re thinking of specific tasks. And you’re not involving different people in the conversation.”

During the two-day summit, there were plenty of opportunities to engage in conversations and cross-pollinate ideas.

On day one, IBACOS partner Michael Dickens set the stage for the summit with his remarks about how builders will need to connect with consumers through their services, their marketing, their designs and how important it will be to create customers for life and keep involved in service relationships with homebuyers. “You have the DNA of the home; you need to capitalize on it over the next 20 years,” he said. He talked about innovation through turnkey shell providers and how product suppliers will partner more closely with builders, land developers and the government. “Companies will combine profit and purpose,” he said.  

Mollie Carmichael, principal, Meyers Research, made data and statistics relevant in her presentation on data-driven solutions. She shared consumer lifestyle trends; better defined generational segments; and deciphered buyer behaviors and motivations. With the data to back her up, Carmichael surprised the audience by saying that home design was the number one motivator for buyers before location and price.

Virtual and Augmented Reality got their due in presentations from BDX (Builders Digital Experience) online design center solutions and BIMaire. It’s possible that in the next few years buyers won’t have to step foot inside a model to purchase a new home.

2018 Alliance Innovation Summit

There were presentations on digital innovations, on new business models, such as the single-family for rent market, and offsite building solutions – from those building shells to those doing modular manufacturing or construction. Of course, financing and profitability was not far from everyone’s mind and Margaret Whelan, founder and CEO of Whelan Advisory, and Stephen Kim, senior managing director of Evercore, delivered in a discussion that focused on the pros and cons of offsite solutions.

For the most part, offsite construction was the star of the summit, especially on day two, with several presenters focused on this solution, which, as Gerry McCaughey, CEO of Entekra, mentioned many times – both from the stage and from the audience – is “a process not a product.” Steve Glenn, manager director of Living Homes, and CEO of Plant Prefab, shared his success with complete modules for custom homes as did Buddy Raney, co-owner of Raney Construction. And IBACOS’ Glenn Cottrell lead participants through a “hands-on” offsite construction cost and profitability analysis using figures in an Excel spreadsheet.

Throughout the two days, participants collaborated, networked, and interacted across disciplines. They came away with ideas on how suppliers and manufacturers can better engage. How suppliers can work with BIM to create seamless supply. Whether quality of life is the new value proposition. Whether component systems are right for their businesses and their markets. They asked questions of each other and of those presenting and seemed excited about future opportunities.

As C.R. put it, “In the next six years, unless you find a new way to build and deliver homes, you won’t be able to build and deliver homes.” With that on their minds, participants left the conference ready to hit the ground running.